On July 24, Margarita Delgado, the acting governor of the Bank of Spain, expressed her view that European banking supervision must adapt to the ongoing changes in the financial system. This adaptation is essential for maintaining effectiveness and ensuring that financial institutions remain robust and resilient, especially in an increasingly digital environment.
Speaking at the event “Ten Years of MUS: Key Aspects of New Banking Supervision,” organized by KPMG, Delgado emphasized the need for future supervision to increasingly focus on digitalization and new technological environments. This entails paying close attention to operational resilience frameworks, managing external vendors, and adjusting business models to meet the evolving needs of customers, new market players, and innovative products.
In the coming days, the results of a recent cyberattack resilience test will be announced. Delgado believes this exercise, which concentrated more on qualitative aspects, has been extremely valuable in assessing how well institutions can react to events that are expected to become more prominent. Financial institutions, she noted, need to be adequately protected against such threats.
Delgado also highlighted that emerging risks, such as climate-related issues, cannot be neglected. Monitoring and managing these risks will continue to evolve alongside regulatory requirements, she explained.
During her speech, Delgado reminded the audience that Europe has already begun implementing reforms in supervisory tasks. The most significant of these reforms aims to establish a more risk-focused supervision approach. This change means that supervisory teams will have greater flexibility in identifying the areas where they should concentrate their oversight efforts.
She acknowledged that this new approach will involve accepting certain risks, as some areas may temporarily fall outside the supervisory perimeter. However, she asserted that taking this risk is essential for becoming more efficient, focused, and flexible.
Additionally, she emphasized the importance of enabling supervisors to respond quickly to any new situations that may impact the financial system.
Another key aspect that Delgado wants to reinforce is the implementation of supervisory measures. Any identified problems or deficiencies will not be adequately addressed without proper enforcement of corrective actions, which could range from requirements to economic penalties and other sanctions in cases of significant non-compliance with regulations or decisions from the European Central Bank.
Lastly, Delgado reminded the audience that the banking union is not yet complete. The journey that began a decade ago with the establishment of the Single Supervisory Mechanism and Regulation is still ongoing, as a common deposit guarantee scheme (EDIS) is still lacking.
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